In Aleisa v. Square, Inc., No. 20-cv-00806-EMC, 2020 U.S. Dist. LEXIS 188024 (N.D. Cal. Oct. 9, 2020), Judge Chen stayed an action pending SCOTUS’ review of what constitutes an ATDS.
All three of the Landis factors weigh in favor of granting Square’s motion to stay the proceedings pending the Supreme Court’s forthcoming decision in Duguid II. First, and most importantly, issuing a stay until the Supreme Court decides Duguid II would greatly simplify a key question of law in the instant case—what constitutes an [*17] ATDS. There is no dispute that Plaintiffs must prove that Square sent them loyalty text messages using an ATDS. See 47 U.S.C. § 227(b)(1)(A)(iii). But whether Square used an ATDS will depend on how the Supreme Court defines that term in Duguid II. If the Supreme Court reverses the Ninth Circuit and holds that an ATDS must use a “random or sequential number generator,” 47 U.S.C. § 227(a)(1), then Plaintiff’s TCPA claim is likely doomed because, according to Square, the equipment it used to send loyalty text messages to Plaintiffs does not use a random or sequential number generator. In fact, Plaintiffs allege in the complaint that their cellphone numbers are “captured, stored and linked with the payment card used to complete the transaction,” such that “Square . . . [automatically] sends that consumer . . . unsolicited ‘loyalty texts’ for marketing purposes.” Compl. ¶¶ 13, 15, 17-18 (emphasis added). The complaint does not allege that Square’s ATDS uses random or sequential number generator. Therefore, the Supreme Court’s upcoming Duguid II opinion might not only decide an important legal question in this case, it could altogether dispose of Plaintiffs’ complaint as a matter of law. United States v. Garcia-Gomez, No. 14-CR-00120-EMC-5, 2019 U.S. Dist. LEXIS 12623, 2019 WL 331279, at *2 (N.D. Cal. Jan. 25, 2019) [*18] (granting a stay because the Supreme Court granted certiorari, and the Ninth Circuit ordered additional briefing, in cases that would define a term that is central to one of the defendant’s claims); Bay Area Surgical Grp., Inc. v. Aetna Life Ins. Co., No. 5:13-CV-05430 EJD, 2014 U.S. Dist. LEXIS 83152, 2014 WL 2759571, at *3 (N.D. Cal. June 17, 2014) (“Efficiency and simplification resulting from the abatement of a federal action may weigh in favor of a stay.”). Plaintiffs’ rely heavily on Komaiko v. Baker Techs., Inc., where the court denied the defendant’s request for a stay because [U]nder Ninth Circuit precedent that is not before the Supreme Court in [Duguid II], Baker’s technology could still be considered an ATDS under Ninth Circuit law if it has the capacity to store or produce numbers ‘using a random or sequential number generator,’ regardless of whether it was being used for that purpose when it sent texts to the dispensaries’ customers.” No. 19-CV-03795-DMR, 2020 U.S. Dist. LEXIS 143953, 2020 WL 5104041, at *3 (N.D. Cal. Aug. 11, 2020). But as noted above, the complaint herein does not allege the capacity to generate random or sequential numbers, and at the hearing, Plaintiffs conceded they have no information at present to so indicate. Second, “the early stage of this litigation weighs in favor of a stay.” Capella Photonics, Inc. v. Cisco Sys., Inc., No. C-14-3348 EMC, 2015 U.S. Dist. LEXIS 27953, 2015 WL 1006582, at *2 (N.D. Cal. Mar. 6, 2015) [*19] . The case is still in the pleadings stage, even though the parties have conducted very limited jurisdictional discovery. “Consequently, very little substantive work has been done in this case, and there are no immediately pressing deadlines or trial dates.” Id. “In the absence of a stay, the parties will have to expend time and money conducting discovery on an issue central to Defendant’s liability while lacking a clear idea of the law that will ultimately apply at summary judgment or at trial.” Ambrezewicz v. LeadPoint, Inc., No. EDCV162331JGBKKX, 2017 U.S. Dist. LEXIS 214342, 2017 WL 8185862, at *4 (C.D. Cal. May 8, 2017). Indeed, the parties and the Court would have to engage in costly and time-consuming class action discovery and ongoing litigation, which could be wasted if the Supreme Court reverses the Ninth Circuit in Duguid II. Larson v. Trans Union, LLC, No. 12-CV-05726-WHO, 2015 U.S. Dist. LEXIS 83459, 2015 WL 3945052, at *8 (N.D. Cal. June 26, 2015) (“[I]f the case is not stayed, the Court, the parties, and the absent class members . . . would all face the risk of dedicating substantial resources to proceedings that may ultimately prove unnecessary.”). Third, Plaintiffs argue that they will be prejudiced because a stay will cause “the irretrievable loss of critical evidence.” Docket No. 49 (“Opp’n to MTS”), at 12-14. Specifically, Plaintiffs worry that Twilio and Bandwidth, Square’s former vendors who sent the text messages at issue in this case, will destroy their records related to the text messages. Id. at 12. Indeed, Plaintiffs have submitted evidence that they are likely to “struggle in obtaining text message logs from third party carriers because carrier’s average retention period of text message logs (without consent) is approximately 18-24 months.” Id. at 13. These are legitimate concerns, but the Court is convinced that the parties have several tools at their disposal—like preservation agreements or preservation subpoenas, for example—that can preserve relevant third-party vendor information while the case is stayed. Moreover, Square risks sanctions, including issues or presumption sanctions, if relevant discovery is lost. Therefore, with the appropriate protective measures in place, the risk of potentially lost evidence is insufficient to deny a stay in the face of a pending Supreme Court decision that will decide a key legal question in the case. Larson, 2015 U.S. Dist. LEXIS 83459, 2015 WL 3945052, at *8 (“I agree with Trans Union that it is implausible that a one-year delay will cause either of these [*21] things to occur, and Larson provides no specific facts or reasoning that indicate otherwise.”); Bay Area Surgical Grp., 2014 U.S. Dist. LEXIS 83152, 2014 WL 2759571, at *5 (“This nebulous contention [regarding the risk of lost evidence] is entirely unsupported, however; just what evidence is at risk and how it could possibly be lost or destroyed is a mystery.”).7 Accordingly, Square’s motion to stay the proceedings in this action pending the Supreme Court’s decision in Duguid II is GRANTED.